Canadian Development Aid

Past Bilateral Engagement

This is a further step in the long-term process to increase Canadian-Mongolian bilateral engagement. A bilateral aid program has been in the making for some years, at least since the visit of then-PM Batbold to Ottawa in Fall 2010.

A CIDA (now amalgamated in DFATD) officer has been posted at the Canadian embassy for some years. Then-Min of Intl Cooperation Bev Oda visited Ulaanbaatar in August 2011 and a number of smaller development projects in Mongolia funded by CIDA have focused on public service reform and women parliamentarians (those are the projects I am aware of).

The announcement of the addition of Mongolia to the list of focus countries and the increase of the budget share devoted to these countries from 80 to 90% suggests that more concrete announcements of Mongolia activities will be coming, perhaps during the next visit any high-ranking Canadian political officials might make to Ulaanbaatar.

Motivations for Engagement

Canadian engagement with Mongolia appears to be primarily politically motivated. Compared to other countries on the DFATD priority list, Mongolia is relatively prosperous and does not face any kind of humanitarian crisis. Other large donors are also either winding down activities in Mongolia (USAID) or switching from a grant-making to a loan-based engagement as Mongolia is closing in on upper middle-income country status. [See the WorldBank for this classification of countries. The band for lower middle-income goes to $4,085 per capita GNI, Mongolia currently stands at $3,160 (2012) up from near $2,000 in 2010.]

So, why should a country that’s growing economically be a priority focus for foreign aid?

The cynical/critical perspective on this points to an overlap between trading patterns and development aid. This is an aspect of the priority list announcement that Kristen Shane of The Embassy identified, for example.

From my perspective this not a case of commercial interests driving development engagement entirely, but rather one where commercial interests have produced a plethora of expertise on the resource sector in Canada, not just among corporations, but also governments, academics, NGOs and development experts.

It is in this common source (a pool of expertise) that I see the roots of a productive and non-cynical overlap between commercial interests and development activities.

In this context I also take note that the volume of bilateral trade and investment is somewhat inflated by the formal part-ownership of the giant Oyu Tolgoi gold and copper project by Vancouver-based Turquoise Hill even though this stake is effectively controlled by Anglo-Australian Rio Tinto. Canadian commercial interests, even in the mining sector, are thus at the moment limited to exploration and the near-development of relatively smaller projects, professional and other services, as well activities in other sectors. This may change in the future, of course.

I am more skeptical on the direct involvement of corporations in the delivery of development projects, though there surely is some scope for collaboration in this as well.

What Role for Canada?

The role that Canada can play very effectively in my mind is to help Mongolians understand and evaluate the policy alternatives that present themselves, in part on the basis of decades-long experience with resource policy in this country. This is not to imply that there is a Canadian or a British Columbia model to follow, but rather that this experience might point to the consequences that policy choices that present themselves to Mongolian decision-makers might have. As I have explained in a recent interview in the Mongolian Mining Journal, “Mongolians must ask their own questions, find their own answers”, but Canadian expertise can (and should, I think) support such a search.

“ensuring human development, decreasing rural-urban disparities and improving economic competitiveness.
“The goal of Canada’s assistance is to help the country stimulate sustainable economic growth by strengthening public service capacity, particularly the management of the extractive sector.”

Given the expertise that Canada offers in some of these areas, it is not surprising that Canadian development aid might be welcomed by Mongolians and might contribute to the more sustainable and equitable continued development of that country.

Disclosure

As one of the relatively small (but active) cabal of Mongolia-interested Canadian academics, I (hope to) benefit from increased governmental interactions between the Mongolian and Canadian governments. However, I am not on any payroll in the facilitation of such interactions. I do regularly discuss opportunities with Canadian and Mongolian officials. I also do hope to be more directly involved in development activities in Mongolia at some point sooner rather than later.

First, Canadian aid. For those who have followed the history of Canadian ODA there are large failures (industrial wheat farming in East Africa anyone?) and (quite a few) small successes (often with MAF projects). The intentions are good but there are elements of fad-ism and careerism that has hindered CIDA (and other country ODA programs) over the decades. The reality that the Harper Government is proudly tying (that used to be such a negative term!) Canadian assistance to Canadian advantage makes me uncomfortable.

On the other hand, that Mongolia is receiving official attention in spite of its (very) relative affluence is welcome: the people are deserving. As a landlocked country, bordered by assertive and sometimes competing powers, it has a difficult political and developmental road to follow. The idea that Canada could provide a modest counterweight (Germany, for example, does much more, as does the USA) to these influences should give comfort to the competing political forces in Mongolia as they steer (to use a cold war expression) a kind of “Finland” course that avoids choices between one or another powerful neighbour.

Drilling down, it is also true that Canada has relevant experience to share even if not every Canadian mining entity in Mongolia has lived up to expectations. That need not be a barrier to future contributions, contributions that might happen sooner and to greater effect because of the change of status given Mongolia.

Of interest: CESO (Canadian Executive Service Organization http://www.ceso-saco.org) has an MOU (signed about 3 months ago) with the Mongolian Ministry of Mines. My understanding is that the process of defining exactly what CESO volunteers might do in support of Mongolian’s “forming their own questions/finding their own answers” is underway.